U.S. telecoms firm Verizon Communications Inc posted a 16 percent increase in quarterly profit helped by higher revenue in its wireless business after it raised data prices and started selling the latest Apple Inc iPhone.
Verizon said on Thursday it was on track to meet 2012 financial goals, while adding its capital spending for the year was expected to be lower than 2011's $16.2 billion.
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Verizon Wireless, like rivals AT&T Inc, and Sprint Nextel, is spending billions of dollars on upgrading its network to support booming demand for services like web surfing and video on smartphones like the iPhone. Higher data usage, in turn, can translate into better profit for these companies.
"Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years," Chief Executive Lowell McAdam said in a statement, referring to new customer numbers.
For the third quarter, Verizon made a profit of $1.59 billion or 56 cents per share compared with $1.37 billion or 49 cents per share in the year-ago quarter, when the firm was hit with costs from a two-week workers' strike and weather damage.
Revenue rose to $29 billion from $27.91 billion in the year-ago quarter. Analysts on average expected revenue of $28.96 billion according to Thomson Reuters I/B/E/S.
Excluding exceptional items, the company reported earnings of 64 cents per share, in line with analysts' expectations.
Its Verizon Wireless venture with Vodafone Group Plc added 1.8 million net new subscribers in the quarter compared with 882,000 in the third quarter the year before.
Verizon Wireless, the No.1 U.S. mobile provider, posted a 7.5 percent increase in its quarterly service revenue to $16.2 billion.
At the end of the third quarter, smartphones constituted more than 53 percent of Verizon Wireless' retail postpaid customer phone base, up from 50 percent at the end of second-quarter 2012, the company said.
About 35 percent of an estimated 1.9 billion cellphones sold worldwide this year will be smartphones. Between 20 percent and 25 percent of people in the world already own smartphones, with the penetration rate rising to 50 percent to 55 percent in the United States, according to research firm Gartner.
(Reporting by Sakthi Prasad and Neha Alawadhi in Bangalore; Editing by Hans-Juergen Peters and Mark Potter)